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Part A
RTS Pty Ltd, a resident private company, was incorporated on 1 July 2018. From 1 July 2018 until 30 June 2020, it conducted a newsagency business. The company incurred the following trading losses for tax purposes:
In July 2020, the company discontinued its newsagency business, restructured and acquired a family restaurant business. The company’s shareholdings of ordinary shares at the close of each financial year were as follows:
Shareholders | 2019 | 2020 | 2021 | |
$ | $ $ | |||
A | 200 | 200 | 200 | |
B | 200 | 200 | 200 | |
C | — | 600 | 600 | |
D | — | — | 800 | |
400 | 1000 1800 |
For the tax year ended 30 June 2021, the company reported a taxable income of $70,000.
Required:
Discuss the tax implications of the above events for RTS Pty Ltd. for the year ended 30 June 2021, citing relevant legislation and showing all calculations.
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